The rally in the US dollar index continued for the sixth consecutive week. The index struggled to breach the key resistance at 104 initially. But the index managed to rise past this hurdle on Thursday. The index tested 105 and has come-off slightly from there to close the week at 104.47. The rise above 104 in the dollar index dragged the euro sharply below the support at 1.0480.
Data release this week showed a slight dip in the US inflation. The US Consumer Price Index (CPI) rose by 8.2 per cent for April after rising 8.5 per cent in March. Elevated inflation, prospects for an aggressive rate hike from the US Federal Reserve continue to support the US dollar to retain its strength. For the coming week, there is no major data releases from the US.
Dollar Index: Bullish
The short-term outlook is bullish for the dollar index (104.47). The region between 104 and 103.80 will be a very good support zone. Any further dip from current levels can be limited to…